September 25, 2014

East West Railroad in Central Brazil soon to overcome Major Hurdle

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

One more hurdle for the construction of the east-west railroad connecting central Mato Grosso with an existing railroad in the neighboring state of Goias is expected to be overcome this week. The Brazilian Environmental Institute is expected to issue the all-import environmental license this week opening the way for further development of the railroad. After the environment license is issued the next step is obtaining the actual building permits. The environmental license is generally the biggest hurdle in the entire process and it takes the longest time to obtain.

After construction begins, the railroad is expected to be completed within five years. The 1,500 kilometer railroad will connect Lucas do Rio Verde and Sorriso in central Mato Grosso with the city of Gruacu in Goias. In Goias, it will connect with the North-South railroad allowing grain to be shipped from Mato Grosso ports in northeastern Brazil.

The railroad will pass through the important expansion areas of eastern Mato Grosso where ranchers are quickly converting pasturelands to row crop production. This conversion of pastureland to crop production in recent years has been responsible for the vast majority of increased soybean production in the state. The railroad is expected to result in a 30% savings for the transport of grain, lumber, fuel, and other products compared to truck transportation.